Most of the change from 2000 to 2006 in U.S. net capital outflow as a percent of GDP was due to a(n)
A)decrease in U.S. investment.
B)decrease in U.S. national saving.
C)increase in U.S. investment.
D)increase in U.S. national saving.

Question

Quizplus · Accepted Answer

Net capital outflow is equal to investment minus national saving. Therefore, a decrease in national saving (which lowers the denominator) will increase net capital outflow as a percent of GDP. Therefore, the change from 2000 to 2006 was due to a decrease in U.S. national saving.

Most of the Change from 2000 to 2006 in U